The rate of unemployment the UK has increased slightly, as the country's cost of living crisis continues.
In the three months to October the rate was 3.7 per cent, compared with the previous figure of 3.6 per cent, the Office for National Statistics said.
“While unemployment in the UK remains close to historic lows, high inflation continues to plague economies around the world as we manage the impacts of Covid-19 and [Vladimir] Putin's invasion of Ukraine,” Chancellor of the Exchequer Jeremy Hunt said.
“With job vacancies at near-record highs, we are committed to helping people back into work, and helping those in employment to raise their incomes, progress in work and become financially independent.”
Basic pay in the period rose at its fastest rate since records began in 2001, up 6.1 per cent. This figure does not include jumps in pay during the pandemic, which were distorted by lockdowns and government support for wages.
The ONS said the share of people not in work and not looking for it, known as the economic inactivity rate, fell in the three months to October to 21.5 per cent, 0.2 percentage points lower than the previous three-month period. However, this rate remains 1.3 per cent higher than before the pandemic, it said.
Interest rate decision looms
The Bank of England will be closely watching the numbers, as well as the latest inflation figures due out on Wednesday, as it ponders its latest decision on interest rates later this week.
“The labour market has now turned,” Kitty Ussher, Chief Economist at the Institute of Directors, said.
“While unemployment is still, thankfully, very low by historical standards, it has started to march upwards. The Bank of England therefore needs to pause for thought before continuing its aggressive path of interest rate rises.
“When the medicine is starting to work it can be reckless to keep increasing the dose.
“On balance a slight and cautious rise on Thursday is probably justified until it becomes clear that inflation is on a firm downwards path. However, anything more would risk overshooting their medium-term target leading to unnecessary pain among those seeking work to raise their household incomes.”
Pay gap
At 7 per cent, pay rose fastest in the business services and finance sectors, while wage increases in retail and hospitality were not far behind.
However, overall, the wage figures showed a growing gap between private and public sector pay. Average regular pay growth for the private sector was 6.9 per cent in the three months to October, while for public sector workers pay grew at an average of 2.7 per cent.
The release of the numbers comes not only on the day that rail workers begin their latest series of 48-hour strikes, but also as thousands of public sector workers, including nurses and Border Force staff prepare to take industrial action over pay and conditions.
Strike action will take place almost every day in December. Unions are forecasting that more than a million working days will be lost in the month, making it the worst for disruption since July 1989.
The unions are chasing inflation-related pay increases for their members. The rate of inflation is currently running at 11.1 per cent. On average, the government is offering public sector workers wage increases of 5 per cent. In real terms, pay has fallen by 2.7 per cent.
“Any action that risks embedding high prices into our economy will only prolong the pain for everyone, and stunt any prospect of long-term economic growth,” Mr Hunt said.
The ONS said 417,000 working days were lost due to industrial action in October, the highest number since November 2011.
